Middle East Oil Output Faces Long-Term Constraints Through 2027

The EIA’s Short-Term Energy Outlook suggests that while production shut-ins are expected to ease from their current third-quarter average of 6.72 million barrels per day, a full return to pre-conflict output levels remains elusive. Most producers in the Persian Gulf are likely to remain hampered by infrastructure and shipping bottlenecks that have plagued the region since late July. Saudi Arabia, Iraq, and Kuwait continue to report significant curtailments, with a combined total of over 5 million barrels per day affected as of July.

In contrast, the United Arab Emirates has successfully circumvented these logistical hurdles. By utilizing onshore pipelines to bypass the Strait of Hormuz and employing alternative tanker strategies, the Abu Dhabi National Oil Company has restored production to record highs. This agility stands out against the broader regional trend, where other nations struggle to navigate the high-risk maritime environment. Consequently, the EIA has raised its Brent crude price forecast for the third quarter to $85 per barrel, reflecting a market braced for prolonged supply uncertainty.